Which will survive best, IBM or Sun Microsystems? It's up to IT managers which of the two companies they choose to run their IT infrastructure -- and ultimately, which one of the two is more likely to continue operating -- but what makes interesting reading is the different approach the two companies take to their customers in the mid-sized server market. But are they really so different?
The IBM story
During a recent visit to IBM's labs at Rochester in below-freezing Minnesota, iServer division manager Mark Shearer was at pains to emphasise the difference between Big Blue's approach to its customers and the rest of the industry.
No surprise there, as all companies like to differentiate themselves from the competition. He positioned the piece of Big Blue for which he is responsible very much in business terms.
Shearer explicitly contrasted IBM's approach with that of Sun: "Our clients that participate [in a dialogue with IBM] come with an integrated business point of view. There's little input is about optimising processors, it's about business dialogue, about reliability and availability. It's not a technology-driven dialogue."
The rest of Shearer's pitch was along similar lines. He said that iSeries customers buy the kit because its simplicity and low cost of operations result in productivity. "In some client installations, even if their hardware were free, the cost of running the system would be more than running an iSeries environment", he said.
He cited an example of a multi-million dollar business which runs its IT using two people -- and a couple of iSeries servers. Analyst reports were quoted to bolster the claim and reportedly showed that the cost of running an iSeries is between 40-60 per cent lower than "an industry-standard environment". Shearer then predicted that business imperatives are likely to become more important than the technology issues in the next few years.
The Sun approach
According to Sun data centre marketing manager Paul Leonard, there are some similarities between the two approaches.
He said: "We both deliver complete and integrated technology solutions that enable our customers to grow their businesses through IT. We both do this by focusing on the business issues of our customers, and then, often in conjunction with partners, we deliver a solution to address those business issues."
Leonard then differentiates, saying that technology makes the difference, rather than the more holistic approach, including services, that IBM offers. And while he stressed the benefits of the company's technology -- enabling businesses to grow faster, offer better levels of service, or reduce costs, for example, he also differentiated the company's services. "When Sun delivers services", he said, "We deliver them as part of our customer's team, so that the customer retains control and agility. In contrast IBM focuses more on addressing customer needs through its Global Services organisation; technology is less the focus, more it is on providing people and services."
Sun claims to invest around 15 per cent on R&D, which Leonard called the most important investment within Sun. He cited Sun's development of Sparc, Solaris and Java as results of its R&D efforts, and went on to talk again about solutions that include services.
"We recognised the need for customers to be able to build an agile low cost infrastructure data centres. So we delivered an architectural approach -- the service-optimised data centre -- that delivers an agile architecture through deploying multi-threading servers and industry standard hardware. More importantly it's a business-centric approach to transforming the data centre from a cost centre to a revenue generating asset."
So what conclusions can you draw? While Sun emphasises its technology, IBM wants you to look at its offerings to the mid-sized server market in a more business-oriented manner. There are a few potential explanations.
One explanation is that IBM has morphed into a more services-oriented company and so its message fits in more with that overall direction. But it's more complex than that, since IBM, the much bigger organisation, has both a wider brief and a fatter portfolio of products and services. And to a degree, the same is true of Sun, which is hanging onto its slowly eroding lead in the mid-sized server market -- but can do so only by hammering on about its technology, the main differentiator it possesses.
Perhaps a more fruitful angle is to ask who the target audience is for each company's carefully tailored messages. By talking technology, Sun talks to the data centre manager. By talking pure business benefits and actively avoiding talk of technology -- and incidentally, of price -- IBM cosies up to the data centre manager's boss; it's been the IBM way since forever.
Ultimately, it's about offering as much as the customer can afford to pay for in order to maximise margins. And since the data manager's boss will have a bigger budget, that's the person to target. Note: IBM makes a profit and Sun doesn't, so it could be argued that, in this particular segment at least, Big Blue's got this one right.
As to which will survive though, you decide.
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